How to deal with sellers like this?

2 Replies

Tony,

A lot of deals are priced as 'market' or 'unpriced'. IF they are a serious seller (big assumption), they should be providing you with all the info to do your own underwriting. In addition to the financials, you also need local area occpancy rates, local CAP rates, etc.

Are they giving you any information (e.g. Rent Roll, P&L, etc.). If they also are NOT giving you this information then there is not much to go on to determine an offering price.

Alternatively as I have seen others suggest, give them whatever number they want and during the DD period figure it out. Once you have the right value, re-negotiate. It is an investment of time and as long as your $ are not at risk, thats OK. You have to be somewhat 'seasoned' to do this as you are on a deadline to decide and if you miss something and go firm, you open yourself up to a world of problems.

I personally don't do this but there those that do.

Good luck,

Oren

Run your numbers on what you think it is worth to you, whether you're flipping or buy and hold. If he says yes, then buy it without worrying whether he wanted more or less. I think Brandon said on a podcast; "asking price doesn't matter. Whether you pay more than asking or less doesn't matter. It only matters what your numbers tell you".